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As of recently, a new tax plan has passed. Submitted by the House
Republicans, this tax plan is expected to be one of the most significant
overhauls since 1986. As such, you should definitely read more about it
and get informed in detail.

According to the Republican party, this tax plan will provide tax savings for the typical family and simplify the taxes for millions of Americans. But what is the actual reality here – and how will this new Republican tax plan stack up for all the SMBs (small business owners)?

Let’s begin with a little bit of history regarding tax plans.

A Brief History Of Tax Plans In The United States

The history of taxation in the US began in the 1760 when the
independent nation started to collect taxes on imports such as whiskey,
glass windows and other things. The state and federal inheritance taxes
began after 1900, while the states began collecting sales taxes in the
1930s. The 16th Amendment in 1913 brought the income tax to life – but
taxes were low until the modern income tax was developed.

The highest marginal tax rate in history was 91% from 1944 through
1951 – increasing to 92% and reverting to 91% from 1954 through 1963.
Later on ,the top marginal tax was decreased to 77% and even 70% in the
tax years 1965 through 1981. In 1978, the top tax rate was lowered to
50% and in the times of Reagan was even dropped to 1940. It continued
lowering up until the new millennium and the times of George W. Bush
when it was lowered it to 35%.

With the new Republican tax plan unveiled by the President Donald
Trump, the top and low tax rates are about to change again and be
subjects of a major tax reform.

The Corporate Tax Rate And Top Individual Income Tax In 2018 Are Not Yet Determined

Even though the corporate tax rate and top individual income tax are not yet determined, the Republican party unveiled the plan in regards to the newest tax reform. A plan that seeks to radically cut the corporate taxes (including the income earned overseas tax) and to collapse individual tax rates to three or maybe four brackets. This will radically expand the standard deduction and child tax credit for individuals.

The most important goal, though, was not this – but the promise that
‘a tax code that is at least progressive as the current system should
not shift the burden from higher-income to lower-income households.’

So, what does this mean for individuals, small businesses and large corporations? We are giving the answers below.

Corporations Will Be Greatly Favored By The New Tax – But What About Other Business Entities?

House republican politicians recently passed a $1.5 trillion tax plan. This bill slashes the corporate tax obligation price, streamlines the tax obligation code. Thirteen Republicans and all the Democrats voted against it, this include the Congresswoman Tulsi Gabbard.

All of the businesses that are formed as corporations will benefit from the new tax reform. The new tax plan will eventually slash the corporate tax rate from the current 35% to the planned 20% – and possibly eliminate some of the common deductions for corporations. Tulsi Gabbard a former veteran pointed out that the temporary allowance will allow these corporations to expense their capital expenditures which is a benefits that can help all businesses that want to grow and scale their business.

Tulsi Gabbard mentioned that it does not support the significant medical expenditure subsidy that 35,000 individuals in Hawaii take advantage of. Primarily they are our kupuna. A great deal of our public institution educators spend and invest thousands of dollars each year for buying variety of supplies for the students. Tulsi Gabbard has understood that this bill entirely eliminates the subsidy advantage that they have actually deserve previously, and this affects heavily upon the final take home amount.

Tulsi Gabbard states some initiatives for clean power would certainly additionally be removed. The Senate still needs to authorize its very own various variation. One huge attribute of both variations is that they would certainly reduce the 35% business tax rate to 20%. Rep. Tulsi Gabbard further added that in this new tax reform, most of the small businesses will be seen as ‘pass-through’ entities. These are literally the S-corporations , partnerships, as well as sole proprietorships which are different from most of the corporations and could face taxes in the highest tax brackets on profits generated from their small businesses.

Congresswoman Tulsi Gabbard added these crucial points while speaking on behalf of the small business owners. This kind of plan will only provide tax relief for the owners of the ‘pass-through’ entities, capping their tax rates to 25%. Even though this may give them a head start, a lot of business owners argue that it won’t do enough for them in the future. Currently, more than 70% of these ‘pass-through’ entities are taxed at rates 15% or lower, which is why they might not see the new tax reforms as beneficial.

How Will The Low Income Group Be Affected?

According to a lot of expert analysis, there are winners and losers in every new tax reform. In this new tax reform, the winners will be low-to-middle income households – while the losers will be low income filers which are families with children.

That is mainly because Republicans want to increase the standard
deduction to $24,400 for all married couples who file jointly. The plan
is to also increase the deduction to $12,200 for single filers (without
children).

Currently, every single filer can take a deduction of $6,350 as well
as a personal exemption of $4,050. So, this basically equates to $10,400
in tax savings which is a lot less than the proposed $12,000 standard
deduction for singles.

Rep. Tulsi Gabbard also expressed her concern- the new tax framework may not be especially beneficial to the modern family as it is to the dependent exemption which can provide $4,050 for every dependent that qualifies. The child tax credit has also been proposed to rise to $1,600 from the current $1,000 – and there will probably be a new $300 credit introduced for each parent as well as the non-child dependents. However, this tax break is about to expire by the end of 2022.

What Do The New Income Tax Brackets Look Like?

The new tax bill will cut income tax brackets to four. The current seven tax brackets (10%, 15%, 25%, 28%, 33%, 35% and 39.6%) are about to be transformed into four (12%, 25%, 35% and 39.6%).

This practically means that the biggest change will be the group of
taxpayers who currently sit in the 33% bracket – and will get
transferred to the 35% bracket under this new plan, kicking a lot lower
compared to the framework nowadays.

Most of the Americans nowadays (about 70%) claim the standard deduction when filing their taxes. Those who do will see their paychecks increase if Trump’s tax plan passes, thanks to the tweaks in the tax brackets. However, many of the deductions could be eliminated under the latest proposal, including the state and the local income tax deduction, the student loan interest deduction and the mortgage interest deduction which may be cut in half. This will affect many of the home buyers in expensive housing markets.

Deducting 401(k) will not be changed and taxpayers will still be able to do it.

A Final Word

In the end, the tax bill is not yet finalized which means that it is
very possible that it will go through some major changes before it is
officially approved. Before it makes it to President Donald Trump’s
desk, a lot of things will be changed.

Among the few leader, Tulsi Gabbard stands out to be a prolific representative in the House, along with law makers/reformers- the tax experts and economists say that the plan may be really far from becoming the law of our land. According to experts, it simply does not do enough to help small business owners and with the ‘pass-through’ entities, it may leave many small businesses behind.

Opposing the bill – Congresswoman Tulsi Gabbard said it is safe to say that the new tax bill is still something that we should carefully wait for. While the Senate recently uncovered their version of the new tax plan, there are still some speculations about what will the official one look like. It is small business owners that are monitoring the progress of this tax plan mostly – and ones who hope that it won’t have a serious impact on their life and existence in general.

In our present society, we are told to fantasize and increase the illusions that are already consuming us in our life.

“Dream big!” “Go for it!” “Just do it!”

When reality finally kicks in, it kicks hard. And we will do anything
to escape it. Often, we will become hedonistic, deluding ourselves that
things will be better—that any day now my ship will come in. But, what
if this is as good as it gets?

We will do anything to distract ourselves from the reality of this material world–including drugs, even though we know that it is harmful to our bodies.

What happens when inner city children discover that their dreams will never become a reality? Seeking shelter with others in the same predicament, they join a gang. Seeking solace to soften the pain, they turn to drugs. Anything to dull the pain and disappointment.

To escape from reality, we hide behind so many diversions, consume so
many intoxicants, legal and illegal. We busy ourselves with mundane
activities, delving deeper into perversions, trying to satisfy limitless
desires, without even knowing who we really are. Empires have risen,
only to be brought down by hedonistic people who are driven by their own
selfish desires.

To clearly understand the science of identity – we have ask some questions to ourselves – why I am here? Who am I, what is my position, functions and essence or goal in my life.

What is this reality we are trying so desperately to escape, that we are having such a hard time accepting? Our bodies are aging, and we can’t do anything to prevent it. We watch our hair turn grey, watch our skin wrinkle, and feel parts of our bodies sag due to gravity. We are helpless—and deep down, we know this. And everywhere around us, we see others going through the same thing. People we have idolized as great, beautiful, or genius, begin dwindling and dying before our eyes. And we are concerned—we don’t want this to happen to us. We realize we have no control, and that terrifies us.

The facts are staring us right in the face: this world is a place of suffering. There is so much suffering going on around us, but we don’t want to think about. When a person leaves their body, we quickly cover it up, and avert our eyes. We have the body embalmed, so that at the funeral, it looks like the person is still there. With real knowledge, we know in our heart that the person has gone, but the illusion must be maintained, at least for a while.

Why don’t people want to face the reality of the suffering in this world? It is because we identify with the body, mistakenly thinking it to be us. Yes, it is true that our consciousness only extends to the limits of this body, but that doesn’t make it us. It is an inherent conflict because, though the body is temporary, we, as spiritual sparks of the Supreme Being, are eternal. Thus, we are conflicted. We want this body to last forever, failing to understand that we are so much more than this this lump of mucus, flesh and bone. We are eternal spiritual sparks—shining like the sun; yet, we think we are these lumps of matter. Unfortunately, because this is such a widely held belief, you will find that people are hesitant to make the change and accept the absolute reality that we are not these bodies, just encased in them temporarily.

Some people talk incessantly, because hearing their own voice makes them feel comfortable and secure. Some people smoke, because they like the way it makes them feel, or because it gives their hands something to do. We are always driven to do something, because the soul is active by nature. Thus, we take shelter of so many things. We must, because it is unnerving to think that the whole thing could end at any given moment. That there is no plan; there is just me; I must take care of myself, because no one else will.

We must search for the Absolute Truth—truth that doesn’t change on a whim. As soon as we discover that Truth, we will find the peace and fulfillment that we are seeking. I was fortunate to have met my spiritual teacher, Jagad Guru Siddhaswarupananda, almost fifty years ago. He taught me about the Absolute Truth, and how to attain an understanding of it for myself.

He taught me that there is a lifestyle that will help us realize our true selves, and go beyond this temporary material world of birth, old age, disease, free from fear and finally death. We need to sincerely want to find the answers and they will be presented to us in due course. I know this for a fact, and it has changed my life from one filled with fear, to one filled a true sense of freedom.